LAFCO approves dissolution of Del Paso Manor Water District and annexation into Sacramento Suburban Water District

The Sacramento Local Agency Formation Commission voted 7-0 to approve the dissolution of the Del Paso Manor Water District and its annexation into Sacramento Suburban Water District, adopting a CEQA categorical exemption (Section 15320) and conditions that designate Sacramento Suburban as the successor agency.

The action follows a multi-year review that identified infrastructure and operational deficiencies in Del Paso Manor and a board-level decision by Del Paso Manor to seek reorganization with Sacramento Suburban. LAFCO staff told commissioners the change is intended to provide a more logical boundary for water service while protecting existing Sacramento Suburban ratepayers from having to absorb Del Paso Manor’s immediate capital costs.

LAFCO staff presented a map and summary showing Del Paso Manor as about 672 acres surrounded by Sacramento Suburban’s existing roughly 18,823‑acre service area, which includes parts of Arden Arcade, Carmichael and North Highlands. Staff said Sacramento Suburban (also referred to in the record as SSWD or Sac Suburban) already provides 24‑hour system monitoring, emergency response and maintenance and is recruiting additional engineers to support operations.

Under the approved plan, Del Paso Manor’s remaining noncontract staff (the presentation identified two employees) will become employees of Sacramento Suburban to retain institutional knowledge. LAFCO staff said Del Paso Manor ratepayers will fund any improvements needed to address water‑system deficiencies that are not covered by grants, fees, taxes or assessments. The staff report and presentation explained that creating a Del Paso Manor service area within Sacramento Suburban serves to protect Sac Suburban ratepayers from covering localized costs and provides a defined target area for future grant applications.

The commission’s staff report and presentation cited a 2021 grand jury review that prompted a municipal service review (MSR) adopted in 2022 and an addendum adopted May 1, 2024. The MSR found numerous equipment and infrastructure deficiencies and led LAFCO to adopt a resolution of intent to dissolve Del Paso Manor and give the district 12 months to address the deficiencies. District boards later negotiated operational and fiscal studies and, in December 2024, jointly applied to LAFCO to pursue the reorganization.

LAFCO staff recommended the project qualify for a CEQA categorical exemption (Section 15320, changes in organization of local agencies) and noted determinations that the proposal would not create irregular boundaries, would not adversely affect agriculture or open space, and would not reduce water available to meet regional housing needs as determined by the Sacramento Area Council of Governments (SACOG).

Key conditions in the commission’s approval include designating Sacramento Suburban as the successor agency for Del Paso Manor — with transfer of assets, liabilities, real and personal property — and an amended condition requiring that Sac Suburban’s board, within six months of LAFCO approval, take action “within its authority and discretion” to create a separately designated service area or form a separate financing mechanism (for example, an assessment district, community facilities district or zone of benefit) for the Del Paso Manor service area.

Public comments were mixed. Kathy Lauer, a Del Paso Manor resident, objected to an advisory committee and what she described as last‑minute additions that would give directors stipends and perks, saying: “This is a failed business, and now they’re being rewarded. … So I 100% object to this advisory committee being just put in at the last minute.”

Carl Doak, identified as board president of Del Paso Manor Water District, told the commission the DPM board supports the combination. “On behalf of the DPM board, we support the combination with Sacramento Suburban Water District,” he said, and thanked staff and LAFCO’s executive officer for their work.

Dan York, general manager of Sacramento Suburban Water District, told commissioners the goal is to ensure Del Paso Manor customers receive “a safe and reliable but affordable water supply.” He and other speakers thanked LAFCO staff and both districts’ boards for their work on the reorganization.

Commissioner discussion addressed governance and elections. Commissioner Desmond asked how Del Paso Manor will fit into Sac Suburban’s director divisions; Sac Suburban staff said a draft map from the county registrar places most of Del Paso Manor in Division 5 and a portion in Division 4, and that the district will revisit division boundaries consistent with election law to equalize constituent populations.

Commissioner Desmond and others discussed rates and timing. Staff and Sac Suburban representatives said Del Paso Manor customers will initially be billed under a separate rate structure for the Del Paso Manor service area to reflect remediation and infrastructure investments; the long‑term objective is equalized billing, but timing depends on available state grants and the pace of rehabilitation work.

After discussion, Commissioner Desmond moved to adopt the staff recommendations and related resolutions, Commissioner Jones seconded, and the commission voted 7-0 to approve the reorganization. The commission directed staff to complete the filings required by law. LAFCO staff said the effective date would be five working days after the county recorder records the certificate of completion and once conditions are met.

The approved resolutions referenced in the staff presentation were LAFC‑2025‑07 (recognition of LAFCO as lead agency and CEQA determination) and LAFC‑2025‑08 (final reorganization order and conditions). LAFCO staff noted that, under the government code provisions cited in the staff presentation, the commission’s prior actions and the districts’ resolutions of application limited the commission’s discretion to deny the proposal and allowed dissolution without an election in this specific sequence of actions.

Next steps identified in the meeting record: Sac Suburban board action within six months to establish the Del Paso Manor service area or financing zone; completion of required filings by LAFCO staff; and pursuit of grant funding to support infrastructure rehabilitation.